Dutch Cabinet resigns en masse: A look at the child subsidies scandal that led to govt's downfall

As many as 26,000 parents were wrongly accused by the Dutch tax authorities of fraudulently claiming child allowance over several years from 2012, with as many as 10,000 families forced to repay tens of thousands of euros

FP Staff January 18, 2021 18:54:39 IST
Dutch Cabinet resigns en masse: A look at the child subsidies scandal that led to govt's downfall

The Dutch Cabinet was meeting Friday, 15 January, 2021, amid strong speculation that Prime Minister Mark Rutte's government will resign to take political responsibility for a scandal involving child benefit investigations. AP

The Dutch Cabinet collectively resigned amid an escalating scandal over child benefits which involves investigations into welfare payments that wrongly labelled thousands of parents as fraudsters.

In a nationally televised speech, Prime Minister Mark Rutte said he had informed King Willem-Alexander of his decision and pledged that his government would continue work to compensate affected parents as quickly as possible and to battle the coronavirus .

The move is  largely symbolic. Rutte’s government will remain in a caretaker mode until a new coalition is formed after a 17 March election in the Netherlands.

 

“We are of one mind that if the whole system has failed, we all must take responsibility, and that has led to the conclusion that I have just offered the king, the resignation of the entire Cabinet,” Rutte said.

Not long after delivering his statement, Rutte got on his bicycle and rode to the king's palace in a forest in The Hague to formally inform the king. Dutch television showed him parking his bike at the bottom of steps leading into the palace and walking inside.

What is the child subsidies scandal?

As many as 26,000 parents were wrongly accused by the Dutch tax authorities of fraudulently claiming child allowance over several years from 2012, with as many as 10,000 families forced to repay tens of thousands of euros, in some cases leading to unemployment, bankruptcies and divorces, reported The Guardian.

As per the BBC, parents were branded as fraudsters over minor errors such as missing signatures on paperwork and erroneously forced to pay back tens of thousands of euros given by the government to offset the cost of childcare, with no means of redress.

According to Politico, authorities singled out 11,000 dual-nationality families for special scrutiny. Many families were forced to pay back tens of thousands of euros with no means of redress, plunging them into financial and personal hardship. In 2019, State Secretary of Finance Menno Snel from the social-liberal D66 party stepped down over his involvement in the scandal.

The government has in the past apologised for the tax office’s methods and in March earmarked 500 million euros ($607 million) to compensate more than 20,000 parents.

The Cabinet’s resignation also came after a scathing parliamentary report, titled 'Unprecedented Injustice', was published last month, which concluded that “fundamental principles of the rule of law had been violated.”

The report said that the tax office policies violated “fundamental principles of the rule of law” and criticised the government for the way it provided information to parliament about the scandal.

Rutte expected to return as PM

The resignation brings to an end a decade in office for Rutte, although his party is expected to win the election, putting him first in line to begin talks to form the next government. If he succeeds in forming a new coalition, Rutte would most likely again become prime minister.

Geert Wilders, leader of the largest Opposition party in the Dutch Parliament, said it was the right decision for the government to quit.

“Innocent people have been criminalised, their lives destroyed and parliament was informed about it inaccurately and incompletely,” he tweeted.

On Thursday, the leader of the Opposition Labor Party stepped down because he was minister of social affairs in a coalition led by Rutte when the country’s tax office implemented a tough policy of tracking down fraud with child welfare.

A sitting minister, Eric Wiebes, who also was linked to the scandal, said Friday he was resigning with immediate effect and would not be part of the caretaker administration.

How did the government react to the scandal?

In a written reaction, the government pledged to reform the welfare system as a result of the scandal and to quickly pay affected parents 30,000 euros ($36,300) and expand existing compensation schemes.

“Everything is aimed at offering the parents and their children a new start in life,” the government said.

One of the parents waited near parliament as the Cabinet met and said she wanted it to resign.

“It's important for me because it is the government acknowledging ‘we have made a mistake and we are taking responsibility’ because it's quite something that happened to us,” Janet Ramesar told The Associated Press.

Rutte plans to lead his conservative People’s Party for Freedom and Democracy into the March election, and polls suggest it will win the most seats. That would put Rutte, who has been in office for a decade at the head of three different coalitions, first in line to attempt to form the next ruling coalition.

But he said that it was up to voters at the election to decide on his future, noting that he took ultimate responsibility for failings within his government.

“The buck stops here,” he said.

The Netherlands is the third European country thrown into political uncertainty this week in the midst of the coronavirus crisis. In Estonia, the government resigned over a corruption scandal, while Italian premier Giuseppe Conte’s governing coalition is at risk of collapse after a small partner party withdrew its support.

With inputs from AP

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